Transporters/Trucks owners can be proceeded against under UPGST Act despite not doing business in respect of sale/ purchase of goods – High Court
ABCAUS Case Law Citation:
ABCAUS 2837 (2019) (03) HC
In the instant case, the petitioners were the Truck owners who challenged the individual notices issued against them under section 130 of the UP Goods and Services Tax Act, 2017 (UPGST Act 2017) on the ground that they are only vehicle owners and are not doing any business in respect to the sale and purchase of the goods.
The Petitioners had sought a direction to the Assistant Commissioner State Goods and Services Tax, Mobile Squad to drop the proceedings initiated against the petitioner under section 130 of the UPGST Act, 2017. A further relief was sought directing not to confiscate truck/vehicle and to release the same.
A drive was lodged by the Special Task Force constituted at the State Level against bogus firms involving thousands of Trucks through which goods were sought to be transported and a First Information Report (F.I.R.) was also lodged under sections 420, 463, 464, 468, 471, 34, 120-B of IPC and section 132 of the UPGST Act, 2017 in police station.
The submission of the petitioner was that the GST registration of both the dealers namely the consignor and consignee was active i.e. their registration had not been cancelled inspite of the proceedings having been initiated against them.
It was submitted that when the consignor and consignee were both active, the authorities should have proceeded against them and not against the petitioner transporter who had nothing to do with any illegality or non payment of tax by either the consignor or consignee of the goods.
It was also submitted that the transporters was duly carrying E-way bill as required, containing all the information therein and, therefore, the authorities could have proceeded to make recovery or issue notice against the consignor or consignee.
The petitioner also argued that they were only the owner of the vehicle which they gave to various transporters as per request made by them for transporting their goods and the petitioners themselves were not doing any business with respect to the sale and purchase of goods.
It was stated that the petitioners were neither concerned with the purchaser nor the seller of the goods and their only role was for providing vehicle for transportation of the goods and they were not doing any business as contemplated under section 2(17) of the UPGST Act, 2017.
The contention further was that the petitioners were neither a supplier of the goods or services as contemplated under section 2(105) of the UPGST Act, 2017 nor were they a registered person within the meaning of the term as defined in Section 2(94) of the UPGST Act, 2017 nor were they a ‘taxable’ person within the meaning of the word used in Section 2(107) of the UPGST Act, 2017.
The Hon’ble High Court declined to express any opinion on the allegations contained in the First Information Report and counter/supplementary counter affidavit, as those were factual in nature and was the subject matter of consideration by the criminal trial and any observation in that regard might prejudice the trial.
However, the Hon’ble High Court proceeded to hear the legal plea that they were not doing any “business” as contemplated in Section 2 sub section (17) and is not a “supplier” as defined in Section 2 sub section (105) and were not a “registered person” as defined in Section 2 sub section (94) of the Act, 2017 or that they were not a “taxable person” as defined in Section 2 sub section (107) of the Act, 2017.
The Hon’ble High Court observed that so far as the provisions of Section 122 relating to penalty for certain offences are concerned the petitioners would fall within the definition of ‘any person’ who “in any way concerns himself” in transporting, removing, … and he would be liable for payment of penalty ……, if found guilty of the offence. Likewise they would be liable for confiscation of the conveyance under Section 130 of the Act, 2017 and the third proviso therein if such conveyance is used for carriage of goods … if the offence is established.
The Hon’ble High Court ibserved that a reading of the sections 122 and 130 shows that they are related to ‘any person’ who transports any goods or stores any goods while they are “in transit” in contravention of the provisions of this Act or Rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure shall be released on conditions as laid down in sub clauses (a), (b) and (c) of Sub Section (1) of Section 129 of Act, 2017.
The Hon’ble High Court opined that in view of above, for the application of Sections 129 and 130 of the Act, 2017 it is immaterial that the person proceeded against is not a registered person or a supplier or a taxable person or is not doing any business as provided in any of the sub sections of Section 2 of the Act, 2017.
The Hon’ble High Court opined that it is enough that he is a ‘transporter’ of goods and that the goods are being transported and have been seized in transit and if the charge is made out against the transporter, the authorities can proceed to seize such goods including the conveyance.
The Hon’ble High Court noted that in the present case a show cause notice had been issued to the petitioners and it was always open for the petitioner to file a reply to the same. Also it was open for the petitioner to apply to the trial court for release of the conveyance.
Accordingly, the Hon’ble High Court rejected the contention of the petitioners that they were not doing any business in respect of sale or purchase of the goods or were not concerned with the goods as they were mere transporter and was only providing vehicles for transporting and therefore the impugned notice was bad and without any substance.